What a tsunami? Tsunami is a natural phenomenon that always wrecks havoc in the environment. When tsunami occurs, properties are destroyed, living things—both humans and animals are either displaced from their usual habitat, maimed, or killed. On Wednesday May 2, at the 5th memorial lectures of Ferdinand Anim—one of the faithful sons of the elephant family and Ghana, the potential vice-President of the republic of Ghana—an astute economist released a “tsunami” that created pandemonium, fear, panic, and disquiet within the ruling National Democratic Congress government, especially those at the upper echelon of the party. This tsunami, unlike the natural phenomenon that destroys property, dislodges people from their usual habitat, and in most times takes the precious lives of human beings, the one that happened in the country brought about deliverance, emancipation, and enlightenment to those who hitherto had been subjected to the pathological and run-on lies by the government via her propagandists. Dr. Mahamadu Bawumiah's tsunami shook the very foundation of the government and exposed their incompetence and intentional blurring of the true state of our economy.
The revelation by the aspiring vice-Presidential candidate of the New Patriotic Party shows that either the statistical service is genuinely making mistakes in their measurement of the economic indicators of the economy, or the government is deliberately throwing dust into our eyes about the true fundamentals of our economy. What Dr. Bawumiah did in anatomizing the state of our economy, was not to challenge or question the credibility or integrity of the state institution, but rather asked questions about the dislocation between the measured indicators: inflation rate, interest rate, prices of goods and services, and the exchange rate. He simply wants to know why inflation has been falling continuously for over a year, but the interest rate is not responding in the same direction? He also wants to know why a fall in inflation is producing astronomical increases in the prices of goods and services. Don't forget that during the reign of the NPP administration, when inflation was brought down from about 41% in 2001 to 18.1% in 2008, interest rate was lowered from about 50% to about 27% during the same period. But under the NDC, when inflation drops from 18.1% to 8.8%, the interest rate has moved down marginally to about 26%.
Dr. Bawumiah demonstrated to us with empirical evidence that there should be a positive correlation between the rate of inflation, interest rate, and prices. This means that as the rate of inflation is falling, interest rate must also fall. Again, we should not experience a monumental increase in the prices of goods and services when the inflation rate plummets. But what we are witnessing in the country is the reverse: negative correlation between the rate of inflation and the other macro-economic indicators. Is it not puzzling? Do we need a rocket scientist to tell us that some things don't add up? Absolutely not!
These questions are basic and legitimate that demand answers from those who have been mandated to manage our scarce resources, but because the government has been fibbing ever since assuming the management of the country, what they have resorted to, is not to challenge the fundamental issues raised by the renowned economist, but rather questioning his intellectual acumen and at times calling him names. Is it not a shame? For some of us, the use of insults and the attempts to question the credibility and expertise of Dr. Bawumiah were expected: the government has been caught pants down, and does not have any convincing and cogent reasons to halt the tsunami that has exposed their propaganda and lies.
The effect of this tsunami is so devastating to the extent that the deputy minister for youth and sports—Dr. Omane Boamah—a medical doctor and some inexperienced members of the government's communication team hop from one radio station to the other with economics textbooks trying desperately to play down the fatal injury done to this lying administration. The bottom-line in the presentation by Dr. Bawumiah is captured in his famous statement: “you can engage in all the propaganda you want but if the macroeconomic fundamentals are weak, the exchange rate will expose you.” And the government has been exposed big-time.
After dissecting the economy, and exposing the inconsistencies inherent in it, we are now aware that the economy is suffering from kwashiorkor. President Mills is presiding over a “kwashiokortic” economy. The purported growth of the economy and the so-called macroeconomic stability are not consistent with the empirical facts and the documented relationships that are expected to exist between them. It is only under the Mills-Mahama led administration that economic growth doesn't lead to the creation of jobs. Our economy is said to be booming, but unemployment is on the increase. When an economy is expanding or growing, we expect a corresponding increase in the rate of employment, and not unemployment.
The economy is said to be booming, the rate of inflation is said to be in single digits, but unemployment has been the worst since we attained statehood. How do you explain an economy that is purported to have produced 1.6 million jobs in 2009, but could manage only an additional 100 thousand within a 2 year period? If it is not a kwashiorkor economy that can achieve that, how could that be explained? Folks, some things don't add up. How can you explain this scenario convincingly to the average literate? I mean how? No wonder the Secretary-General of the Trades Union Congress, Mr. Kofi Asamoah during the May Day celebrations sarcastically questioned the relevance of a booming economy with a rising rate of unemployment by stating “Your Excellency the reality [is that] the unprecedented growth rate…has failed to create decent jobs for Ghanaians.”
Coming events, they say cast their shadows before. What we are experiencing under this mickey-mouse administration is simply a déjà vu: the current dislocation in the economy was experienced during the second term of the first NDC administration, especially between 1999 and 2000. What is not surprising though, is that the same persons who were responsible for the mismanagement of the economy at that time are the same ones at the helm now. President Mills, who was the vice-President at the time, was the head of the economic management team, with the current vice-President as a member of the team. The current minister of finance—Dr. Dufour used to be the governor of the central bank during the period under consideration, with the current governor of the central bank—Mr. Amissah Arthur as his deputy. So why are Ghanaians surprised?
The foregoing is a clear indication that the economy is in wrong hands. President Mills and his lieutenants are incapable of managing the country. If governance were to be based on propaganda, then I would have rated them high, but sorry folks, it is far from that. Governance is about the people; it is about the economy; it is about improving the living conditions of the people and leaving behind a legacy that inures to the benefit of the living and the unborn generations. We don't need propaganda; what we do need is good governance. But under President Mills' administration, the former is their focus, maybe they think we are all gullible; but sorry not all of us are that gullible. Let us proof to President Mills and his malfunctioning administration on December 7 this year that we don't manage an economy via propaganda by voting them out of office. They were not ready to govern, and are not ready for another term. God bless Ghana!
Source: Kingsley Nyarko, Psychologist, Accra ([email protected])